Holding station while waiting for the tide to turnPosted on Written by Bill Sisson
During tough economic times, its easy to lose your perspective. A steady diet of bad news can lead to the refrain: The sky is falling the sky is falling.
Given the volatile October that has finally been put in the rearview mirror (and good riddance, too), thats understandable. So just how bad are things? And when will they get better? Is the sky really falling?
For a dose of perspective, I spoke with John Anderson, the new CEO of Australias Riviera Yachts and an old hand in the U.S. boatbuilding industry. A former senior vice president of sales and marketing at Sea Ray, Anderson also helped manage two turnaround projects, one with Rampage and the other with Four Winns, as well as doing a stint with Bombardier. Hes been part of boating long enough to have seen the inevitable ups and downs that are woven deep into the fabric of this highly cyclical business.
This industry has been around for a hundred years, and it has survived wars, countless recessions, the oil embargo, the luxury tax, Anderson told an audience at a Riviera gathering the evening before the start of the Fort Lauderdale International Boat Show last month. Weve survived all this as an industry.
Some of us have survived corporate bankruptcy. [Anderson was running Four Winns when corporate parent OMC went bankrupt in 2000.] And we will survive this just as we have everything else put in front of us.
The industry veteran also is realistic about the current slump. Youre not going to sell your way out of this, Anderson told me before his press conference. Youll go broke doing it. You have to manage your way out. Thats a distinction that all of us need to keep front and center as we go about our daily business.
Manage your way out of it.
Anderson has learned from both personal experience and other savvy industry vets, including Eddie Smith of Grady-White Boats, who years ago advised Anderson to always build one fewer boat than dealers are asking for. Its a mantra hes subscribed to ever since.
The No. 1 sin a boat company can do is build too many boats, in any market, Anderson says. Going into this current downturn, he says some builders could have come off the hammer sooner.
For several years, Riviera has aggressively introduced new boats into the U.S. market. New product is vital, says Anderson, quickly adding, the right new product. Its understanding what the customer really wants to buy.
He continued: There are opportunities to be had in this environment. There are still people out there with money. And theyll spend it.
NMMA president Thom Dammrich also talked about maintaining perspective during downturns in remarks he made to the Marine Marketers of America during the Fort Lauderdale show. And like Anderson, he, too, saw opportunity amid what he described as great turmoil and change.
I predict that those who take control of change and use change will not only weather it, but will prosper beyond their expectations, says Dammrich, who predicts recovery in 12 to 18 months.
The down market, he says, is the time to be taking market share and getting ready for the recovery.
What is your perspective? Dammrich asked. Too many in the boating industry always see their glass as half empty. If you view your glass as half empty, you need a new perspective.
At one point, he quoted Thomas Edison: Opportunity is missed by most people because it is dressed in overalls and looks like work.
Dammrichs strategy for weathering the current market malaise includes:
Simplify, focus on whats important; everything you do should add value.
Invest in new products, innovate, and be creative.
Use this time to strengthen your brand with consumers.
Now more than ever, keep your people; communicate good news and bad.
Develop new markets; strive for better penetration in existing ones.
Act now; delays will kill you.
Succinctly define your business; sell the experience of boating, not the thing.
Heres what all of us who have been in this business for any length of time know: The boating consumer is not going away. Theyre in it for the long haul. Theyre lifers like you and me. Theyve been sitting on the sidelines for a while now, hibernating, holding onto the boats they already own, content to maintain them, perhaps springing for some upgrades. But as soon as credit markets thaw, confidence rises, the mortgage crisis is worked through, and the jobs picture stabilizes, theyll awaken.
And when the tide swings and rest assured, it will swing theyll be back.
It may be raining pretty hard, but the skys not falling.
This article originally appeared in the December 2008 issue.